Where do you stand?

Is regulatory uncertainty the main factor limiting new investment?

Why is American business investment growing at such a disappointingly slow pace? Some economists argue that low growth expectations are the main constraint on businesses, but others suggest that new and looming regulatory changes are putting a chill on investment appetites. Is regulatory uncertainty the real problem?

Majority of present day economists and analysts either are living in past or in present but without any iota of future trends.
What are the future trends? Future trends are being shaped and will be determined by IST (Innovations of Science and Technology). IST has formed the basis of globalization which in its initial phases seemed to be hurting developing countries. And there was some truth in it. Yet globalization had and has potential of inclusion. Disparities created by globalization will ultimately not only decrease but also will be alleviated by improvement in the standards of life in poor and developing countries. Main vehicles of globalization are digital technologies and ICT.
Not unexpectedly , impact of globalization is negative on rich world. There could not be any reversal of this new phenomenon which manifests in slow down coupled with higher rates of unemployment in rich world and continuous process of emergence of new bright spots on the map of developing countries.
People talk of greed of financial sector that led to subprime loans, mortgages and derivatives in USA and West Europe but they do not realize that it was primarily something else.
It was compulsion of the system in these countries particularly USA to maintain growth rates at complacent level with the help of consumption model because growth was not otherwise maintainable as premium profits out of transactions with developing countries had started decreasing since 1990’s
Why? Because globalization of Knowledge, Research, Innovations and Development (KRID) has started enabling the previously poor and developing countries to process raw materials in their countries and produce finished products . Thus they started cutting short on being suppliers of primary commodities at lowest prices and buying under compulsion branded products at higher prices.
Result is this present crisis of rich world, hence it will continue in foreseeable future. Main reason of deflation of Japan for last 20 years is the same.
It was not the coincidence that reforms in India, China and other such countries started taking place exactly in the same period when advent of (WWW) and other powerful technologies were ushered in globally , preceded by period when world was switching over to the digital technologies.
But global economy cannot grow smoothly if crisis in rich countries continue. USA, Japan and some other rich countries have been main engines of IST and still have great infrastructure and human resource for that but their capability is likely to be compromised if their crisis continues.
This is reason why investors do not find attraction in new investments at previous scale. Hence, it is high time USA and EU should review their relationship with developing countries. They would have to defeat their hangover of supremacy of the past and start to live with new realities. If they did so, world will benefit and they would stabilize and if they chose to be reactionary, not only they would suffer more but whole global growth and development will face hiccups.

I believe that it is but not in the sense that I feel the question intends. Americans have a one sided view on reglation - that it reduces business activity. The reality is that good regulation can encourage business activity by providing a safer, more reliable environment.
Let's be honest the GFC ocurred because there was inadequate regulation allowing far too much dodgey dealing (to use the technical term).
In the current circumstances the right regulation will greatly encourage investment.

No! I would say that it is the regulators “certainty” that forces banks to have higher capital requirements when the perceived risk of default is high, even though banks have already considered that, which stops a lot of investments.

PS. A video that explains a small part of the craziness of our bank regulations, in an apolitical red and blue! http://bit.ly/mQIHoi

Logically, investments must pay off beyond the short run, but it is difficult to have confidence in medium-term forecasts of demand without clear understanding of how the US Congress will reshape the political economy with regard to structural deficits, entitlement spending, defense spending and distribution of the tax burden. Only when Congress cleary and with a distinct majority defines a political-economic structure to replace the current bickering about straw men will businesses feel confident about investing. As far as I can tell from history, it doesn't seems to matter whether the structure is the New Deal or Reaganomics: Investment requires confidence in a consistent set of policies.

The issue is that our economy is in the middel of a substantial transformation. Policies are being debated that are in conflict with each other. The outcome of those debates will have a dramatic effect on investments. This unceartainty is holding investors back because no one wants to come out on the wrong side of the fence. Once the smoke has settled on energy, trade, and currency issues, investors will have solid ground to stand on. We will see investments grow from there.

It's all about aggregate demand. The present value of investment today equals the value of future consumption. When consumption i.e. demand is extremely uncertain then investments wont be made and just sit as idle cash, or invested in securities.

Regulatory uncertainty should not necessarily be the focus point as far as growing investment is concerned. There is a factor of the uncertain economic performance and the business cycles etc...that may be worrying investors. Regulatory focus seems to be placed in the direction of ethical business conduct the world over. Business regulation will soon be about: Are we doing the right thing? Ultimately; it will be a debate between greed vs. ethics. So, businesses that have questionable ethical standing should worry and start changing their practices becuase this is the future.

Money does not sit around waiting to be invested. It is not worthwhile and who ever has money does something with it. However, today so much money is owed that a lot of incomming money is being used to cancel out past debts. This is why investment is lower than before.

Businesses are more fearful of future demand prospects for their products rather than regulation uncertainty. Once they feel confident in the public's willingness to increase consumption, new investment will begin again (especially with many of them sitting on tons of cash along with the current cheap borrowing costs). While bad or uncertain regulation affecting a business can be a limiting factor, the biggest element to business investment decisions lie in customer demand projections.